Golden Cross – Which is the best?

May 20, 2013 5:00 am3 comments

The Golden Cross typically referrers to the crossing of the 50 and 200 Day Simple Moving Averages. When the shorter term average moves above the longer term average this is seen by many as the beginning of a sustained bullish period and vise versa. It is not wise however to risk your money in the market on the assumption that such a theory is true. One has to ask, which is better, a SMA Golden Cross or an EMA Golden Cross? Are the settings of 50 & 200 really the best? What is the profile of the trades that this strategy generates as far as duration, probability of profit, draw downs etc.  In order to answer these questions we applied […]

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Relative Strength Index (RSI) – Test Results

April 8, 2013 5:00 am0 comments

The RSI is a staple indicator of the technical analysis community but how good is it, really?  What are the best settings?  What does its trade profile look like?  Ask around and no one can tell you…  Does it not seem strange that so many traders can be using an indicator without solid data on its performance?  Well we are on a mission to change that.  We tested 3800 different RSI settings through 300 years of data across 16 different global markets~ to reveal the facts. Download A FREE Spreadsheet With Data, Charts And Results For all 3,800 RSIs Tested RSI – Test Results: Our Testing Strategy Explained ANY, Range = 1 ANY > 0, Range = 1, 2, 3, 4, 5 ENTRY […]

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Combine Indicators to Identify High-Probability Reversals

March 11, 2013 5:00 am1 comment

I read about this indicator in an article titled “The DMI Stochastic,” which appeared in the January 2013 issue of Technical Analysis of Stocks and Commodities.  The article was written by Barbara Star.  In the article, Star combined two well-known technical indicators to create an innovative new tool that can be used to identify high-probability reversal candidates. The following article explains the procedure required to calculate the DMI stochastic (DMISTO) and demonstrates the potential of this new indicator with a sample pullback strategy that achieved a win rate of over 80% (since 2000 – in sample).  AMIBroker code for the DMIS is included at the end of the article. The DMI Stochastic (DMISTO) In the late 1970s, J. Welles Wilder introduced […]

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MACD – Test Results

March 4, 2013 5:00 am0 comments

The MACD is one of the most widely used technical indicators in the world and is included in every charting program worth owning.  Unfortunately however, reliable data on its performance is almost non-existent.  Are the standard settings of 26, 12, and 9 the best?  To reveal the answer we tested 2000 different combinations through 300 years of data across 16 different global markets. Stand by for the results below… Our Testing Strategy Explained Because there are so many different possible settings for a MACD we started by testing a broad range with the hope this would reveal the areas to focus on more closely.  To cast our testing range wide but strategically, we progressed in a linear fashion through the Fast Moving Averages […]

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The Use of Recession Indicators in Stock Market Timing

February 25, 2013 5:00 am0 comments

In previous articles I showed that stock market timing models, such as IBH and MAC, can provide better returns than what one could get from a buy-and-hold strategy. However, investors with long-time horizons can also do well by only exiting the stock market at beginnings of recessions and returning to the market when the market is recovering. Recession indicators such as COMP are useful in identifying recession starts. To re-enter the market one can successfully use the buy signals from the IBH model. This strategy would have provided a compound annual return of 15.5% from 1980 to the end of 2012. COMP is a recession indicator derived from the composite data of three freely available U.S. economic indices, hence its name COMP. (See […]

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Is This The Best Stock Market Indicator Ever?

June 25, 2012 5:00 am9 comments

By  John F. Carlucci of Advisor Perspectives As we all know, the key to successful investing is very simple: “Buy low, sell high.” However, you enter a chaotic, fun-house world of uncertainty once you ponder the logical follow-up question: “When?” Investors desperate to solve this riddle have come up with solutions as varied as Fibonacci Analysis or the length of women’s hemlines. At some point, most exasperated investors have even considered the strategy articulated by Seinfeld character George Costanza: “If every instinct you have is wrong, then the opposite would have to be right.” (see video clip) Luckily, there is a technical indicator that answers the “When?” question with a high degree of specificity and predictive value: the percentage of S&P 100 stocks above […]

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Equity Curve Indicators

June 18, 2012 5:00 am7 comments

This free EasyLanguage download includes two indicators. First is the Open Equity Curve indicator and next, the Daily Equity Curve indicator. These indicators display a strategies open P&L or total daily P&L. Both indicators will work with any strategy.

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Relative Strength Rank Indicator

October 16, 2011 4:16 pm6 comments

This indicator is a ranking tool used to compare a group of stocks, ETFs or futures contracts to determine which specific instrument is performing best. The indicator creates a score based upon the symbols historical price movement. You can then compare this score to the other RS Rank scores of other stocks or ETFs in your basket of trading instruments. Thus, you can simply pick the instrument with the highest RS Rank score when creating a momentum based trading system. ( ( Long Term Price Change + Short Term Price Change ) / 2 ) / 10 Day ATR The RS Rank is computed by taking the average of a long-term price change with a short term price change. This average […]

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